Vaccine rollout, strong buyer demand to bring normalcy to spring housing market
Originally posted in Livabl_
The 2020 spring real estate market was unprecedented — the onset of the COVID-19 pandemic in March prompted a province-wide lockdown across Ontario, upending what is normally one of the busiest seasons of the year for home sales.
As 2021’s spring market inches closer, industry experts say that many encouraging signs are pointing to a typical standard busy home buying season.
Ontario is still in the early stages of its vaccine rollout and there remains potential for volatility in the market. But as the vaccination effort gains momentum, this period will be followed by stabilization as spring arrives, explains Simon S. Mass, CEO of The Condo Store Group of Companies (TCS).
As more individuals are vaccinated, Mass explains that more traditional real estate events and meetings can be resumed. Slowing the virus’s spread will also have a positive effect on consumers who haven’t been directly affected financially by the pandemic. Workers who haven’t lost income have increased their savings considerably to endure potential job loss. With that job loss risk reduced, Mass says these individuals may gain more confidence to spend, creating a new cohort of condo and home buyers in the springtime.
“While the pandemic accelerated the purchase plans of many renters, there was also the view among some people that a pandemic is a poor time to make a big financial decision, such as buying a house,” Mass explained to Livabl. “It’s these households that may decide that early 2021 is their time to buy, only to run into the challenges of low inventories and high prices, specifically in Toronto.”
For Toronto residential developers, things are mostly moving ahead as normal, Mass says. A number of Greater Toronto Area projects are prepared to launch sales in the coming months. TCS is also working on multiple proposals for investment purposes, Mass says. Some developers rushed to market during 2020 despite the uncertainty, while others waited it out — Mass expects a return to equilibrium in 2021.
Photo: James Bombales
“There is a science to this trillion-dollar sector and it’s not based on a few blips that we see during a short recessionary or pandemic period,” he said. “With time, markets will heal, and investors will continue to prosper.”
After a year of rising inventory and lower sales figures compared to the suburban regions, Mass predicts that Toronto’s condo market should get back to pre-pandemic levels as the effects of the pandemic wane.
In its latest market report, the Toronto Regional Real Estate Board (TRREB) noted that the demand for condo apartments is expected to remain strong in 2021. Rebounding immigration to the GTA, supported by a substantial global vaccine administration effort and increased immigration targets from the federal government, will bolster the market’s resale and rental segments, the report explained.
Mass also anticipates that historically-low interest rates will lead to consistent price gains this year, specifically in the downtown condo sector.
“It was interesting to see the condo market heat up in December and January locally, which would have been way ahead of most predictions,” said Mass. “It’s a testament to the strength and power of the city of Toronto and the resilience it is showing and will continue to show.”